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the time of trial, the Hawaii housing market was driven by two
major factors: Location and the underlying quality of the
structure. The prime location of the house and its high quality
workmanship caused its value to rise throughout this period until
Mr. Heitzman and petitioner sold it in 1982.
Since 1983, petitioner has been employed as a flight
attendant.
2. Stonehurst Energy Partners
Ronald Freemond, president and sole shareholder of Wind
River Energy, Inc. (Wind River), a Nevada corporation, formed
Stonehurst Energy Partners (Stonehurst) on December 10, 1979, to
engage in the development, drilling, and operation of oil wells.
Wind River was the general partner, and Freemond was the initial
limited partner. Freemond had organized Wind River to be general
partner of Stonehurst. Although Freemond had “substantial
experience in financial planning and tax advantaged investment”,
he and Wind River had “no experience in drilling for oil and
gas.”
Between December 10 and December 29, 1979, Mr. Heitzman and
34 other individuals purchased a total of 175 limited partnership
units in Stonehurst at a cost of $6,200 per unit and a total
investment of $1,085,000. Investors paid $3,100 in cash on the
purchase of each unit and $3,100 with a recourse promissory note
due April 1, 1980.
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